1041 Final - k1

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  • thetaxman2200
    Member
    • Jan 2012
    • 53

    #1

    1041 Final - k1

    If I am correct. When the Final 1041 is filed - the cash distributions to the Beneficiaries does not need to be reported on the final K-1, is that correct? Do I need to report that anywhere?

    Thanks

    Still learning
  • appelman
    Senior Member
    • Jan 2010
    • 1195

    #2
    Is this an estate or a trust?

    Distribution of income, if there is any, must be reported on a K1.
    Evan Appelman, EA

    Comment

    • thetaxman2200
      Member
      • Jan 2012
      • 53

      #3
      Final K-1

      We had a cap loss on the house, and the attorney fees where reported on the K-1. There was about 20k of cash left over after every bill was paid. The 20k was then distributed to the beneficiaries, I could not find where I had to report it or where.

      Comment

      • DaveO
        Senior Member
        • Dec 2005
        • 1453

        #4
        Income and Loss is reported. Cash distributions are not.
        In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
        Alexis de Tocqueville

        Comment

        • Burke
          Senior Member
          • Jan 2008
          • 7068

          #5
          The distributions are reported on Page 2 of the 1041 under the section for Distributable Net Income (DNI). Whether or not they (or any part of this amt) flow(s) thru to the K-1's as taxable, depends on whether there is taxable net income from the estate/trust on Page 1.
          Last edited by Burke; 02-03-2012, 05:00 PM.

          Comment

          • appelman
            Senior Member
            • Jan 2010
            • 1195

            #6
            To the best of my knowledge...

            Distributions of corpus do not go into DNI.
            Evan Appelman, EA

            Comment

            • appelman
              Senior Member
              • Jan 2010
              • 1195

              #7
              Further comment

              IF this is a trust, and IF the house can be considered investment property in the hands of the trust, then the capital loss is also passed on to the beneficiaries on the K-1.
              Evan Appelman, EA

              Comment

              • thetaxman2200
                Member
                • Jan 2012
                • 53

                #8
                So if the the monies are just left over cash - nothing needs to be reported. If cash was in the process of income/loss then this is reported. Correct.

                Thanks

                Comment

                • Burke
                  Senior Member
                  • Jan 2008
                  • 7068

                  #9
                  I stand by my previous answer. A good reference on computing DNI is available at https://www.aicpa.org/InterestAreas/...ustEstates.pdf by Jacqueline Patterson, Atty. See pages 108-6 - 8. It also includes an explanation of how DNI came about.

                  "Generally, the deduction for distributions to beneficiaries is the lesser of:

                  a. The total amount of distributions made, OR required to be made to the beneficiaries; or
                  b. The DNI of the trust or estate.
                  Last edited by Burke; 02-05-2012, 03:48 PM.

                  Comment

                  • dsi
                    Senior Member
                    • Dec 2005
                    • 705

                    #10
                    How did the cash get into the trust? Was it "income"? That is, proceeds from the sale of property? Interest/Dividend Income?
                    Dave, EA

                    Comment

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